“The New Elite Aristocracy”: Mitt Romney’s Wealth Problem
Americans have come to expect a certain patrician baseline from their political class. Congress is stocked full of millionaires, and in the 2008 campaign Joe Biden was considered working class for riding Amtrak, despite having a net worth in the hundreds of thousands. No one bats an eye now when Rick Santorum whines about his meager means on the debate stage then releases tax returns revealing that he rakes in over $900K a year.
Yet, Mitt Romney’s wealth has served as an albatross to his campaign. We might be used to millionaires running for president, but Romney would rank among the richest handful of presidents if elected. His vast fortune is more than double the total worth of the past eight presidents combined. Newt Gingrich played on resentments of Romney’s wealth to great success in South Carolina before dialing back his attacks once the Republican establishment turned on him, accusing the former speaker of employing leftist critiques of capitalism.
Romney’s campaign has danced around the issue throughout the campaign, but over the weekend TPM‘s Pema Levy noticed a new strategy emerging from Romney and his friends:
On Friday, Romney had another one of his out-of-touch moments when he said that his wife Ann “drives a couple of Cadillacs.” But rather than try to walk back the comment, team Romney appears to have a new tactic for dealing with this problem.
When Romney and a surrogate were asked about Ann’s Cadillacs on the Sunday talk shows, their response was not to hide or apologize for Romney’s wealth. Instead, their message boiled down to: Yes he’s rich, get over it.
When questioned about the line on Fox News, Romney said, “If people think there’s something wrong with being successful in America then they better vote for the other guy.”
Mitt Romney wants to have it both ways. He sees himself as the fulfillment of the American ideal; the personification of the 1% that many middle class Americans believe they will one day reach, even if upward social mobility is increasingly difficult.
Yet, Romney also presents himself as attuned to the travails of normal working folks. He calls himself unemployed, claims to have once worried about receiving a pink slip, and litters his stump speeches with folksy tales of his normal upbringing (leaving out the years spent in a governors mansion) and starting his own, typical small business.
While the two personas appear to be at odds, Romney could get away with the contradiction if his wealth had been earned through other means. The self-made millionaire is a bedrock part of the American tale. But Romney’s struggles are as much about how he accumulated his vast fortune. Private equity is a largely unknown sector of the American economy, and its mysterious practices have a whiff of the under-the-table financial Wall Street instruments that brought economic ruin to the country. Romney earned most of his $21 million 2010 income, not from direct earnings, but from gains accrued off his investments. Rather than exemplifying the entrepreneurial spirit Americans love, the continued growth of Romney’s bank account highlights the divide between the normal working class and the new elite aristocracy whose fortunes continue to rise based on their already accumulated wealth.
By: Patrick Caldwell, The American Prospect, February 27, 2012
“Mitt’s Legacy”: Health Reform Worked In Massachusetts
On February 8 the Center for American Progress hosted an event featuring Massachusetts Attorney General Martha Coakley, where she discussed the success of the Massachusetts health care reform law signed by former Gov. Mitt Romney (R) in 2006.
Attorney General Coakley discussed the framework of the law and explained how it’s played an essential role in providing unparalleled access to health care coverage for Massachusetts residents. She and CAP President Neera Tanden also discussed why the Affordable Care Act’s adoption of the Massachusetts framework fits comfortably within the United States’ constitutional authority.
In her introductory remarks, Tanden said that “the Massachusetts law, though sometimes maligned in our national debates, is actually an incredible success story, and has really demonstrated to the country how effective health care reform can be, and the Affordable Care Act can be.”
She mentioned the new CAP report “The Case for the Individual Mandate in Health Care Reform,” and said that Massachusetts’s embracing of the individual mandate in addition to its nondiscrimination over preexisting conditions has allowed its health care reform to flourish.
Flourish so much, Tanden said, that “98.1 percent of the state’s residents were insured at the end of 2010, compared to 87.5 in 2006, when the health care law started. Almost every child in the state is insured, and premiums in the individual market dropped 40 percent as the Massachusetts law was fully implemented.”
In her speech, Attorney General Coakley described the Massachusetts health care law, saying that “in some, but not all particulars, the Massachusetts Act of 2006 was really the prototype for what has become the Federal Patient Protection and Affordable Care Act.” Like the Affordable Care Act, Massachusetts’ reform includes a state-operated health insurance exchange, subsidies for low- and moderate-income individuals, and a mandate that all individuals who can afford health insurance purchase coverage, or an individual mandate.
Coakley said, “The law has resulted in the highest health care access rates in the nation, it has improved both access to and affordability of health care for hundreds of thousands of residents, while maintaining a high level of quality, and I think that’s important.
“We don’t talk about quality so much, but it’s part of what we are concerned about. Access, cost, quality: Ensuring two is relatively easy, if you want to do all three, not so much. And this has been, and is still, our challenge and our goal, and as a work in progress, I think the facts demonstrate that rather than our experiment proving a risk to the rest of the country, Massachusetts as a test laboratory has a lot to offer.”
She said, “We’ve seen significant improvements in the care of our residents. From 2006 to 2010, adults from all income groups, but in particular lower-income adults, experienced a significant decline in reported unmet health care needs due to cost. … we also have seen significant overall economic benefits for our state as a result of this.”
In terms of costs, she said, “[w]e’ve seen a sharp decline in the amount of spending on the so-called ‘free care,’ [when an uninsured person visits an ER, for example, and costs get passed on to the insured in higher rates] about $300 million, and that’s 33 percent less than we spent in 2006.” And nongroup or individual insurance premiums cost 40 percent less.
Attorney General Coakley also discussed why she believes the Supreme Court will not overturn the individual mandate. Massachusetts, she said, is giving a very positive endorsement for the mandate, and it is “a constitutional act by Congress.” It would be quite surprising if the Supreme Court overturned “the 70 years of precedent that have been set” by case law establishing what Congress has constitutional authority to regulate, including commerce such as health care.
After her speech, Attorney General Coakley spoke with Tanden about health reform. In response to an audience question about the constitutionality of the mandate, Tanden said that “when you say that people have coverage when they go to the emergency room, that immediately means that they’ll be cost-shifting, and the individual mandate is just a way in which people have the same responsibility for their own health care so they’re not shifting costs anymore.”
As Attorney General Coakley asserted, Massachusetts is an essential—and the only U.S. example—of the importance of the individual mandate in ensuring affordable access to health care for all.
By: Center for American Progress, February 27, 2012
What Ails Europe?: Republicans Have No Idea What They’re Talking About
Lisbon.
Things are terrible here, as unemployment soars past 13 percent. Things are even worse in Greece, Ireland, and arguably in Spain, and Europe as a whole appears to be sliding back into recession.
Why has Europe become the sick man of the world economy? Everyone knows the answer. Unfortunately, most of what people know isn’t true — and false stories about European woes are warping our economic discourse.
Read an opinion piece about Europe — or, all too often, a supposedly factual news report — and you’ll probably encounter one of two stories, which I think of as the Republican narrative and the German narrative. Neither story fits the facts.
The Republican story — it’s one of the central themes of Mitt Romney’s campaign — is that Europe is in trouble because it has done too much to help the poor and unlucky, that we’re watching the death throes of the welfare state. This story is, by the way, a perennial right-wing favorite: back in 1991, when Sweden was suffering from a banking crisis brought on by deregulation (sound familiar?), the Cato Institute published a triumphant report on how this proved the failure of the whole welfare state model.
Did I mention that Sweden, which still has a very generous welfare state, is currently a star performer, with economic growth faster than that of any other wealthy nation?
But let’s do this systematically. Look at the 15 European nations currently using the euro (leaving Malta and Cyprus aside), and rank them by the percentage of G.D.P. they spent on social programs before the crisis. Do the troubled Gipsi nations (Greece, Ireland, Portugal, Spain, Italy) stand out for having unusually large welfare states? No, they don’t; only Italy was in the top five, and even so its welfare state was smaller than Germany’s.
So excessively large welfare states didn’t cause the troubles.
Next up, the German story, which is that it’s all about fiscal irresponsibility. This story seems to fit Greece, but nobody else. Italy ran deficits in the years before the crisis, but they were only slightly larger than Germany’s (Italy’s large debt is a legacy from irresponsible policies many years ago). Portugal’s deficits were significantly smaller, while Spain and Ireland actually ran surpluses.
Oh, and countries that aren’t on the euro seem able to run large deficits and carry large debts without facing any crises. Britain and the United States can borrow long-term at interest rates of around 2 percent; Japan, which is far more deeply in debt than any country in Europe, Greece included, pays only 1 percent.
In other words, the Hellenization of our economic discourse, in which we’re all just a year or two of deficits from becoming another Greece, is completely off base.
So what does ail Europe? The truth is that the story is mostly monetary. By introducing a single currency without the institutions needed to make that currency work, Europe effectively reinvented the defects of the gold standard — defects that played a major role in causing and perpetuating the Great Depression.
More specifically, the creation of the euro fostered a false sense of security among private investors, unleashing huge, unsustainable flows of capital into nations all around Europe’s periphery. As a consequence of these inflows, costs and prices rose, manufacturing became uncompetitive, and nations that had roughly balanced trade in 1999 began running large trade deficits instead. Then the music stopped.
If the peripheral nations still had their own currencies, they could and would use devaluation to quickly restore competitiveness. But they don’t, which means that they are in for a long period of mass unemployment and slow, grinding deflation. Their debt crises are mainly a byproduct of this sad prospect, because depressed economies lead to budget deficits and deflation magnifies the burden of debt.
Now, understanding the nature of Europe’s troubles offers only limited benefits to the Europeans themselves. The afflicted nations, in particular, have nothing but bad choices: either they suffer the pains of deflation or they take the drastic step of leaving the euro, which won’t be politically feasible until or unless all else fails (a point Greece seems to be approaching). Germany could help by reversing its own austerity policies and accepting higher inflation, but it won’t.
For the rest of us, however, getting Europe right makes a huge difference, because false stories about Europe are being used to push policies that would be cruel, destructive, or both. The next time you hear people invoking the European example to demand that we destroy our social safety net or slash spending in the face of a deeply depressed economy, here’s what you need to know: they have no idea what they’re talking about.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 26, 2012
“Don’t Criticize Me, I’m Running For President”: Romney Camp Can’t Hold Back From Editing Endorsements
Mitt Romney’s campaign is fast developing a reputation for selectively omitting quotes and passages that reflect poorly on the candidate in its press releases.
The latest blow up is over a pair of newspaper endorsements that Romney received this week, both of which were generally positive but tempered with some criticisms of his position on various issues where they disagreed.
The latest came on Friday, as the Romney campaign sent out another newspaper endorsement, this one from the Arizona Republic, that left out sections criticizing Romney’s position on immigration policy as well as his skills as a campaigner. It did also leave out some more positive passages as well on his foreign policy views.
As reported by TPM this week, Romney’s campaign recently e-mailed out an endorsement from the Detroit News that left out a paragraph criticizing his handling of the auto bailout:
We disagree with Romney on a point vital to Michigan — his opposition to the bailout of the domestic automobile industry. Romney advocated for a more traditional bankruptcy process, while we believe the bridge loans provided by the federal government in the fall of 2008 were absolutely essential to the survival of General Motors Corp. and Chrysler Corp. The issue isn’t a differentiator in the GOP primary, since the entire field opposed the rescue effort.
The editors who wrote the endorsement were upset over the Romney camp’s move, calling it a “distortion” of their words. Although a spokesman for Romney said they were only complying with copyright laws by not including the full editorial, a top First Amendment lawyer told TPM that he was unaware of any relevant legal issues.
Last month, Buzzfeed reported that the Romney campaign was also editing transcripts of its own conference calls with the press to leave out pointed questions and less than stellar answers from its surrogates. In addition, the campaign edited an article on supporter John McCain to leave out a section on their past disagreements and left out concerns in a Des Moines Register endorsement over Romney’s history of changing positions on some issues.
By: Benjy Sarlin, Talking Points Memo, February 24, 2012
“Poor-People Programs”: Mitt Romney’s Budget In About 150 Words
Let’s try to make this as simple as possible. Money comes into the federal government through taxes and bonds. The vast majority of it is then spent on old-people programs, poor-people programs, and defense.
Mitt Romney is promising that taxes will go down, defense spending will go up, and old-people programs won’t change for this generation of retirees. So three of his four options for deficit reduction — taxes, old-people programs, and defense — are now either contributing to the deficit or are off-limits for the next decade.
Romney is also promising that he will pay for his tax cuts, pay for his defense spending, and reduce total federal spending by more than $6 trillion over the next 10 years. But the only big pot of money left to him is poor-people programs. So, by simple process of elimination, poor-people programs will have to be cut dramatically. There’s no other way to make those numbers work.
By: Ezra Klein, The Washington Post, February 25, 2012
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